Author: Ada, Deep Tide TechFlow
On April 20th, Fermi's stock price settled at $5.4.
Six months ago, that number was around $37. And it had just had its IPO last October.
A company less than 12 months old, with zero revenue, zero tenants, and no tangible product to speak of, yet it raised $785 million on the Nasdaq, with its market capitalization once soaring to $12.5 billion.
But then, the CEO and CFO resigned on the same day, the construction site halted, insiders sold $68 million worth of stock, a short-seller published a report alleging fraud, and a securities class-action lawsuit has been filed.
This marks the first major collapse of the AI power narrative.
The "World's First" in the Texas Wilderness
Fermi's story began in early 2025.
Former US Energy Secretary Rick Perry and private equity magnate Toby Neugebauer joined forces to found the company. Their core bet was called "Project Matador": to build the world's largest AI data center campus on 5,800 acres of land outside Amarillo, Texas, initially powered by natural gas, with plans to add four nuclear reactors in the future.
The planned capacity was 11GW of power, alongside approximately 18 million square feet of data center facilities. The label "World's Largest" was repeatedly emphasized.
AI's thirst for power is real, nuclear energy is green, and Trump signed an executive order to expand US nuclear capacity from 100GW to 400GW. All the trends aligned.
The market bought it. On October 1st last year, Fermi went public at $21 per share, jumping to $25 at open, fully oversubscribed. The next day, it peaked at $37, 76% above the IPO price. Within days, this company without a cent of revenue saw its market cap break $10 billion.
Back then, everyone was buying AI power concept stocks. No customers needed, no revenue needed, just a PowerPoint presentation and a vision no one else could see.
The Real Crisis
The first crack appeared last December.
Fermi's sole anchor tenant terminated its contract, widely believed to be Amazon. This tenant had committed to prepay up to $150 million in construction costs but ultimately paid nothing.
Short-seller Fuzzy Panda uncovered the reason behind it. Fermi had promised to secure $5 to $5.5 billion in financing to ensure project execution, but this money never materialized. The tenant grew impatient and walked away.
According to the lease terms with Texas Tech University, without a signed tenant, Fermi wasn't even permitted to begin construction. This created a vicious cycle: no tenant meant no financing, no financing meant no construction, no construction meant no tenant.
The construction site stopped. Workers posted on social media saying "we all got laid off."
Then came the recent bombshell: CEO Neugebauer and CFO Miles Everson resigned simultaneously. The company packaged it as a "Fermi 2.0" strategic transformation. But the stock fell another 22%. From the IPO last year, investors who bought FRMI stock faced maximum losses of up to 78%.
And insiders had already started running. The moment the lock-up period ended on March 30th, Griffin Perry, son of co-founder Rick Perry, immediately sold 11 million shares, cashing out $56.3 million. The COO, CFO, and Chief Development Officer followed suit, with insiders collectively selling over $68 million worth of stock.
Fuzzy Panda revealed that before the lock-up expired, Griffin Perry had attempted to offload 30 million shares in a block trade.
This isn't Neugebauer's first company to face crisis.
In 2022, his "anti-woke" bank GloriFi collapsed, filing for bankruptcy after burning through investments from conservative backers like Peter Thiel, Ken Griffin, and Vivek Ramaswamy. The bankruptcy trustee alleged in court filings that Neugebauer engaged in "securities fraud," "egregious self-dealing," and "fraudulent transfers."
Fuzzy Panda's report also pointed out that several members of Fermi's current management team were associates of Neugebauer from his GloriFi days. Chief Site Development Officer Charlie Hamilton was described in bankruptcy filings as a "longtime friend" of Neugebauer. CFO Miles Everson was also accused of participating in unfair transactions涉嫌利益输送 (involving alleged利益输送 - benefit conveyance).
The bankruptcy court ruled that several of Neugebauer's transactions constituted fraudulent transfers. Yet, despite being accused of fraud at his previous company, his next company raised $785 million on Nasdaq. The IPO prospectus even mentioned these lawsuits could distract management. Investors bought anyway. What does that show? It shows that during a bubble, people don't read risk disclosures; they just look for a sexy enough story.
A Microcosm Under the Bubble
Fermi is not an isolated case. It is a microcosm.
According to data from Sightline Climate, as of April 2026, there are about 140 large data center projects scheduled to come online in the US this year, but only one-third are under actual construction. The rest are either delayed or canceled.
The bottleneck lies in electrical components.
Transformers, switchgear, and batteries – these are essential components for every data center build. Before 2020, delivery lead times for large-power transformers were 24 to 30 months. Now, wait times can stretch to five years. For data centers with deployment cycles under 18 months, this is structurally unacceptable. A delay in any single component can halt the entire project.
The deeper issue is a generational mismatch. The US power grid was not designed for the loads required by AI. Data centers can be built in three years, but power generation takes longer. Solar or wind power generation takes three to six years, gas turbine generation about six years, and nuclear power generation over a decade. Network World magazine notes that this mismatch was manageable when data centers were smaller. But the scale required by AI today, with individual facilities consuming hundreds of megawatts, has become an insurmountable bottleneck.
OpenAI's flagship project, Stargate, reportedly costing $500 billion, had no substantial construction progress as of April.
Partners are locked in disputes over site ownership and system control. The 800MW expansion of the flagship Texas campus has been canceled. Stargate projects in the UK and Norway have been paused successively, and three core executives responsible for Stargate have jumped ship to Meta.
Meanwhile, Alphabet, Amazon, Meta, and Microsoft are projected to spend over $650 billion in 2026 to expand AI capacity. Alphabet alone reported $175 to $185 billion, equating to burning $500 million daily. However, the infrastructure supporting this grand ambition cannot develop at the speed the industry requires.
The last time the US saw a energy infrastructure boom of similar scale was in the late 1990s. The dot-com bubble and electricity market deregulation spurred a wave of natural gas power plant construction, investing about $100 billion. After the bubble burst, many power plants sat idle.
This time, the scale is an order of magnitude larger. US utility companies alone have proposed $1.4 trillion in planned expenditures, 27% higher than last year's forecast. Tech companies' investment in energy-related infrastructure is already twice the annual investment of the entire US power industry.
But from Q3 to Q4, new data center deals have fallen by over 40%. Some analysts believe supercomputing companies' capital expenditures could halve this year.
Money is tightening, but the stories are still being told. This is where the danger lies.
A report by Built In summarized: When vendors heavily invest in startups, and those startups turn around and spend the money on the vendors' own products, real demand and artificially created illusions get mixed together. When a company's customers are also its investors, and revenue grows faster than actual usage, that's a signal a bubble is forming.
When the Bubble Bursts
In this food chain, there are three tiers of players.
The first tier consists of the real winners. These are companies that already own operational nuclear power plants, like Constellation Energy. They don't need to build anything new; they just need to transfer contracts from the grid to data centers to reap the AI power红利 (dividend). Meta signed a 20-year, 1.1GW nuclear power supply contract with Constellation. Microsoft spent $1.6 billion to restart the Three Mile Island nuclear plant. These are transactions with physical assets.
The second tier includes various small modular reactor (SMR) startups, like Oklo, whose stock price has been hyped to the sky, but not a single reactor has been built. US nuclear projects are notoriously known for delays and cost overruns, with almost no recent cases completed on the original schedule and budget. But investors don't care about that.
The third tier consists of companies like Fermi, which don't even have nuclear reactors, haven't started building the natural gas power plant, and have no tenants. They are at the bottom of the food chain, selling not power, but a story. When the story collapses, nothing remains.
Fermi's collapse will not be an isolated incident.
When an industry's actual delivery capability lags far behind the promises made in its PowerPoint presentations, a collapse is only a matter of time.
Of the US data center capacity planned to come online in 2027, only 6.3GW is under construction, while the announced total is 21.5GW. A gap of 15GW exists on paper, corresponding to hundreds of billions of dollars and countless promises that will fail to materialize.
Who will be the next Fermi? No one knows. But in this arena, there's $500 billion searching for power, high-power transformers awaiting delivery, and a slew of startups that haven't even secured basic grid interconnection assuring investors that everything is under control.
When the last energy infrastructure bubble burst, at least some power plants were left behind. This time, many projects might not even break ground.
And Fermi's 5,800 acres of land in the Texas wilderness, along with all the unrealized grand narratives, will slowly be buried by time.
